Related to the Economics in Practice on Page 102: Which

question 122

Multiple Choice

Related to the Economics in Practice on page 102: Which of the following best explains why demand is often less elastic in the short run than it is in the long run?

• A) When demand is elastic, price increases reduce revenue because a small price increase will lead to a large decrease in quantity demanded.
• B) In the short run, consumers have less access to substitutes.
• C) Consumers tend to postpone making purchasing decisions as long as possible.
• D) In the short run, prices can change rapidly, but in the long run they are more stable.

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Definitions:

Short-run Position

A period in economics where at least one input is fixed, making it a timeframe where not all production conditions can be changed.

Profit-maximizing

A strategy or point where a firm achieves the highest possible profit, given its costs and market demand.

Pure Monopolist

A single seller in a market who has the power to control market prices and output without any competition.

Unregulated Monopoly

A market structure where a single seller controls the entire market for a product or service, with no governmental restrictions in place.